To sue, you must have standing.  To have standing, you must have an actual, concrete injury.  In 2011, Experian accidentally gave a lender a list of prescreened consumers.  The consumer found out about this disclosure five years later, after an attorney told him about it.  The consumer admitted that the disclosure didn’t affect his credit, and couldn’t dispute that he probably got (and threw away) the offer the lender would have made to that list of customers.  Still, he sued, claiming that the disclosure breached his privacy and caused him emotional distress.  Experian, refusing to sit on its laurels, filed a counterclaim based on the consumer’s possession of the 2011 disclosure.  The district court determined that nobody had standing, and tossed the entire case.  Both parties appealed.

In Crabtree v. Experian Info. Sols., Inc., 948 F.3d 872 (7th Cir. 2020), the Seventh Circuit affirmed both dismissals.  It determined that violation of a consumer’s statutory rights under the Fair Credit Reporting Act (“FCRA”) alone, without an allegation of a concrete or particularized injury, doesn’t give a plaintiff standing to sue.  Further, the court determined that a credit reporting agency (“CRA”) can’t use the FCRA as a sword against a consumer who technically violates the FCRA in order to bring suit.

Under 15 U.S.C. § 1681b, a credit reporting agency (“CRA”) can provide prospective lenders with prescreened lists of consumers who meet their criteria.  The prospective lenders can then use those prescreened lists to make firm offers of credit or insurance to consumers.  For several years, Experian and a lender named Western Sierra had a contract to do exactly that.  However, Experian terminated its contract with Western Sierra effective November 18, 2011.  Despite this, Experian’s third-party vendor accidentally disclosed a prescreened list to Western Sierra’s third-party vendor on November 30, 2011.  Quentin Crabtree discovered that his name was included in this accidental disclosure in 2016, after an attorney reviewing the disclosure gave him a copy.  Crabtree didn’t dispute that Western Sierra made him a firm offer of credit as permitted by the FCRA, but instead alleged that the disclosure was a per se injury that invaded his privacy and caused him emotional distress.

The Seventh Circuit, applying the Supreme Court’s rationale in Spokeo, Inc. v. Robins, 136 S.Ct. 1540 (2016), held that a party alleging a violation of the FCRA must suffer a real, concrete injury rather than an abstract or hypothetical one.  In short, as both courts stated, “not all inaccuracies cause harm or any material risk of harm.”  Experian, as a CRA, was expressly permitted provide a prospective lender with a prescreened list in order to extend a firm offer of credit.  Even with the contractual hiccup, that’s exactly what happened here.  And had Crabtree never learned of the accidental 2011 disclosure, he “would have gone on completely unaware of and unaffected by any prescreen list.”  When you admit that you could have gone on living your entire life never the wiser about the emotional distress caused by a lender offering you credit, your suit isn’t likely to go very far.

The court also affirmed the dismissal of Experian’s counterclaims on two grounds.  First, Experian only alleged hypothetical injury to its reputation.  Just as with Crabtree’s claims, Experian would have to show actual harm to bring suit.  Second, and much more far-reaching, the court determined that the zone-of-interests test established by the Supreme Court in Lexmark Int’l, Inc. v. Static Control Components, 572 U.S. 118 (2014) bars a CRA from using the FCRA to bring suit against a consumer.  The purpose of the FCRA, the Seventh Circuit found, was to protect consumers.  Experian’s counterclaim was, to the court’s knowledge the first of its kind, lending additional support to the determination that the FCRA was not meant to protect CRAs from consumers.